@Talon3
Many of the issues in completing the HSA interview are due to two causes:
1. The opaqueness and obscureness of the IRS rules on the HSA (not to mention that of Congress), and
2. The huge amount of misinformation on the Internet on how HSAs work.
This causes large numbers of of taxpayers to misunderstand the questions that TurboTax poses. For example, "First, it asks: What type of High Deductible Health Plan did Lindsey have on December 1, 2022? The answer to this is Family. "
In many cases, this Lindsey would have had NO HDHP coverage (people read this as "what type of health coverage", but it specifically refers to HDHP coverage). So, in this first case, the answer would be NONE.
However, in other cases, Lindsey might have been covered by spouse's HDHP Family plan. But if Lindsey did not have her own HSA, Lindsey would never have been asked to go through the HSA interview, and therefore never had the chance to indicate Lindsey's own HDHP coverage. Therefore, TurboTax mistaken thinks that Lindsey had HDHP coverage in 2022 (because of the answer of Self or Family to the question), but had no such coverage in 2023 (because of the lack of HSA interview), so thinks that that Lindsey's coverage has "lapsed".
Who cares if it lapsed? TurboTax is trying to determine if Lindsey used the last-month rule in 2022 to increase the annual HSA contribution limit. What is the last-month rule? You see, that's the problem. TurboTax used to ask people what the last-month rule was, but fewer people understood that question than the current set of questions.
Despite @irritatedExpat 's comment, TurboTax is a DYI product - you are supposed to understand something about what you are doing. TurboTax provides some help (primarily through interview screen comments and Learn More links), but TurboTax cannot teach you everything you need to know about particular segments of taxation like HSAs. Indeed, even many tax professionals don't know what the last-month rule is.
TurboTax asks the questions it does for a reason; and if you can't make sense of them, then do what you are doing now - come to the Community and ask what the question means. But please don't assume that TurboTax doesn't know what it's doing.
Remember that TurboTax offers two additional layers of Live help which would get you through this process with reasonable ease.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
